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First, the program is placed in an extremely weird and non-helpful administrative area for the stimulation of international investment in the USA. Second, its range is all incorrect. We are distributing way too much for also little of a financial investment. Even more, raising equity capital fifty percent a million dollars a tranche is, to claim the least, ineffective.


The local centers, with their half-million systems, basically undercut the a lot more practical million-dollar component of the EB-5 program. Third, such programs, if we have them in any way, as they do in Australia, should have to do with producing business entities, not passive financial investments. It should be concerning developing genuine tasks, not elaborate computations about the indirect development of work, which is now component of the regulation.


Possibly that is among the reasons that it has actually fallen short year after year to get to the legislative goal of 10,000 investment visas. Fifth, the Regional Center Program is naturally clumsy, and the program is also full of middlemen, both public and exclusive. The program has more than its share of rumors, which I will enter later on if any person is interested.


This is an agency that likes to state yes to candidates, however as the table in my testament shows, USCIS police officers have much a lot more difficulty with EB-5 applications than others. I think that is something that nobody has actually actually spoken about much. EB5 Regional Center Program. There are high rates of interior denials in this program and permanently reason

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Seventh, in this program visas go to people who could not obtain them otherwise and to individuals whose scheduled investment is actually much less, according to the Federal Get, than the typical mean total assets of all American families in 2007. Let me increase on among my observations.


My estimate based on the investors' permit applications submitted 2 years after the initial financial investment-- these are the solid ones that remain and are accepted. This is 2009-- was that they had regarding $191 million verified-- that is my estimate. USCIS does not provide the type of information that we can use on this.


So for every $100 of boosted foreign financial investment that year, the EB program added one dime. Under a much more wobbly analytical base, the initial applications of potential immigrant investors, USCIS is informing journalists that the level of financial investment in the just-concluded year was concerning $1.2 billion. Let us accept that.

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Thanks for listening to me. I anticipate your comments and inquiries. [The prepared statement of David North looks like an entry for the document.] Chairman Leahy. Thanks. Our following witness is Robert Divine. He is a shareholder of Baker, Donelson, Bearman, Caldwell, and Berkowitz. He is the head of the firm's immigration method team.




Divine worked as Chief Counsel of the USA Citizenship and Immigration Services from July 2004 till November 2006, the year in which he was Acting Director, and after that Performing Deputy Supervisor. He has actually functioned thoroughly with the EB-5 program in private technique. He was chosen, as I understand, vice head of state of the Association to Spend in USA, the nationwide market organization of regional.


Divine, we are delighted to have you right here. Please proceed, sir. DECLARATION OF ROBERT C. DIVINE, ATTORNEY, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, TENNESSEE, AND VICE PRESIDENT, PURCHASE THE United States (IIUSA) Mr. Divine. Thank you, Mr. Chairman, Legislator Grassley, and others. Thanks for having me.


At most, if all 10,000 ports were used, it would certainly be 1 percent of the immigration annually to the United States. It is not near that yet, however it is growing and getting website towards that. Specifically as USCIS, the company that oversees the program, has been making the rules clearer and the processes much more reasonable and clear for the people that are organizing financial investments and for the financiers that are investing, even more individuals have actually wanted and able to place effort and cash right into the process to discover good jobs and develop them, and afterwards a lot more investors have actually been willing to spend their money and take the threat and use the cash to create the tasks that is the factor of the program.

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These projects do not linger permanently, and USCIS comprehends that and are trying to speed the program, speed the procedure - EB5 Regional Center Program. That does not suggest that they are unwinding their examination, and, as a matter of fact, they are all set to reject applications that are not certifying. And they do so, as was pointed out


The local center part of the program is not. It becomes part of an appropriations bill that was established in 1992, and ever since that program has been extended five times for 19 years. It is time for it to be irreversible, and it needs to be done currently and not nearer to the date of expiration in September.


The procedure takes a good while to function up a project and then to obtain the capitalists approved. And they do not desire their money moving through up until they have actually been approved. And the specter of the expiry of this Regional Facility Program in September is already inhibiting the development of jobs.

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I want to make clear that the Regional Facility Program is not the like the half-million-dollar thing. The concept of half a million or a million is a feature of the normal EB-5 regulation that is component of the code. It just is a truth that the majority of the regional centers that are pooling investments have set those instead of high unemployment or in backwoods where fifty percent- million-dollar financial investments are permitted, which makes good sense.